I bought at peak, right?
When I wrote about the freeze on foreclosures, I got this question:
Rona - as a new homebuyer with a few defaults on my credit report can I go to the bank and get a new "something I can pay for" for 40 years?
As a new homebuyer? I wondered, how new?
A little recent history:
Subprime mortgages were restricted about the time I started on this blog, summer 2007.
It was (and is) still possible to hang yourselves without being in a subprime mortgage. FNMA would allow 50% for mortgage debt in October 2007. Now, it’s hard to borrow with small down payments or above the jumbo limit. But debt is there for the accepting if you have the money to put down with your real estate purchase.
Today (!) no doc loans are still being advertised.
A little less recent history (1991):
During the last recession, my home owner-friends were miserable. Everyone thought they had bought at exactly the peak. Obviously, they didn’t all do it.
Many people bought using adjustable rate mortgages, when the market was rising. Once the market receded, they could not refinance out of them. Some went into foreclosure; some struggled along until the market recovered.
Personal client history:
All my buyers think the market will nose-dive the second they close. I have been hearing it since 1998. Everyone asked about it in the summer and fall of 2001. Then it was intermittent again until about summer of 2002 onward. I advised my clients to make offers as if it was the peak since 1998.
Do you think you bought exactly at peak? It will vary from area to area. When do you think the peak was in your town?
Added note: Some people will think today, when we are officially in recession was the worst day to buy.
